State of New South Wales & Ors v Commonwealth of Australia
[2006] HCATrans 235
[2006] HCATrans 235
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S592 of 2005
B e t w e e n -
STATE OF NEW SOUTH WALES
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Perth No P66 of 2005
B e t w e e n -
STATE OF WESTERN AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Adelaide No A3 of 2006
B e t w e e n -
STATE OF SOUTH AUSTRALIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B5 of 2006
B e t w e e n -
STATE OF QUEENSLAND
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Brisbane No B6 of 2006
B e t w e e n -
AUSTRALIAN WORKERS UNION
First Plaintiff
AUSTRALIAN WORKERS UNION OF EMPLOYEES QUEENSLAND
Second Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Sydney No S50 of 2006
B e t w e e n -
UNIONS NSW AND QUEENSLAND COUNCIL OF UNIONS
First Plaintiffs
PUBLIC SERVICE ASSOCIATION AND PROFESSIONAL OFFICERS’ ASSOCIATION AMALGAMATED UNION OF NEW SOUTH WALES AND NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION AND ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH AND NATIONAL UNION OF WORKERS, NEW SOUTH WALES BRANCH AND NEW SOUTH WALES TEACHERS FEDERATION AND QUEENSLAND TEACHERS UNION OF EMPLOYEES AND COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION – QUEENSLAND BRANCH (CEPU ELECTRICAL DIVISION)
Second Plaintiffs
and
COMMONWEALTH OF AUSTRALIA
Defendant
Office of the Registry
Melbourne No M21 of 2006
B e t w e e n -
STATE OF VICTORIA
Plaintiff
and
COMMONWEALTH OF AUSTRALIA
Defendant
GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J
HEYDON J
CRENNAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 11 MAY 2006, AT 10.19 AM
(Continued from 10/5/06)
Copyright in the High Court of Australia
__________________
GLEESON CJ: Yes, Mr Tracey.
MR TRACEY: If the Court pleases. I understand my learned friend from South Australia has an application he desires to make.
MR KOURAKIS: If the Court pleases. South Australia seeks leave to amend its statement of claim in accordance with the document entitled “PROPOSED SECOND FURTHER AMENDED STATEMENT OF CLAIM” that has been provided to the Court. The purpose can be seen conveniently from paragraphs (i) and (j) of the relief that is sought. It particularises all the provisions of the schedule that were challenged in the course of my submissions. The earlier statement of claim had not dealt with those particular provisions. I understand it is by consent.
GLEESON CJ: This is not opposed?
MR KOURAKIS: Not opposed.
GLEESON CJ: Are you happy with that? Yes, you have that leave.
MR KOURAKIS: If it please the Court.
GLEESON CJ: One other small matter, Mr Tracey. We are going to get a matrix at some stage during the day, is that right?
MR TRACEY: Not from us, your Honour.
MR SOFRONOFF: Your Honour, I will be handing that up.
GLEESON CJ: When it is handed up, Mr Sofronoff, we may need to adjourn for 10 or 15 minutes to study its contents to be sure that we do not have any questions to ask about it.
MR SOFRONOFF: Yes.
GLEESON CJ: Very well. Yes, Mr Tracey.
MR TRACEY: Your Honour, the Chief Justice yesterday asked me about whether the former Schedule 1B had any provisions in it seeking to link it to constitutional heads of power and I said I would look at that overnight. Your Honour, the answer is yes. The former Schedule 1B in section 18 provided for the registration of various forms of associations, associations of employers, associations of employees, and enterprise associations and it was a condition to that eligibility for registration, in each case, that the employer/employees concerned were capable of being engaged in an industrial dispute and that term was defined in section 8 in terms that picked up section 51(xxxv) so that the industrial dispute had to be one extending across State limits and had to be about matters pertaining to the employer/employee relationship, so it was done in that way.
GLEESON CJ: Thank you.
MR TRACEY: Your Honours, I foreshadowed last night that I wished to take the Court to some of the provisions of Part 8 of the Act which commences in volume 1 at page 224. This Part, as the Court knows, is central to the new arrangements under which constitutional corporations will be able to enter into a variety of collective and individual agreements regulating their industrial relationships with their employees. Various forms of agreement are contemplated.
They are identified in sections 326 to 331 and your Honours will note that each of those provisions requires that one of the parties to such agreement be a section 6 employer. The Court might also notice the provisions of section 322 to 324 which elaborate on and expand the notion of a relevant employer, for example, in 324, to pick up prospective employers at the time that an agreement is made.
We would also invite the Court to look briefly at a number of other provisions starting at sections 334 to 335 which provide for bargaining agents to act on behalf of negotiating parties in the striking of these agreements and the Court will see that employers – that is constitutional employers and employees – may appoint bargaining agents to act on their behalf for the purpose of striking an agreement.
Section 337 imposes on employers involved in negotiations certain obligations and in particular to make certain information available to the employees who it is thought may become a party to an agreement. Section 342 imposes an obligation on employers to lodge agreements once they have been made, that is, lodgement with the appropriate authorities. Section 357 is a provision which says that a section 6 employer contravenes the subsection if, when that agreement is lodged, it contains certain material, that is, prohibited content.
Section 358, as I mentioned to the Court last night, renders void prohibited content in workplace agreements. Section 363 enables the employment advocate to remove prohibited content from agreements. So that it is clear, in our submission, that what section 356 is dealing with when it provides that regulations may specify those matters which constitute prohibited content is doing so in a statutory context which links the regulation‑making power to agreements that are to be made between section 6 employers, section 5 employees.
It is the Commonwealth’s submission that there is nothing untoward about such a provision. Normally, it would bear the character of a law with respect to the subject matter dealt with in the legislation. That will be so even in the absence of criteria guiding the content of the regulations. We would submit that, relevantly, the case law can be stated as a series of short propositions. Firstly, that the Commonwealth Parliament may provide for the making of subordinate legislation in wide and general terms without stipulating criteria to guide the exercise of the power, and that has been established since Dignan’s Case. Secondly, that the terms in which the power is conferred may leave the repository of the power free to exercise its own discretionary judgment in determining the contents of the regulations, and the principal authority in support of that proposition is Capital Duplicators. There are others that are collected at footnote 507 of our submissions.
The third proposition is that the power to make regulations to further or give effect to a statutory purpose will have the same character, that is, of a law with respect to the subject matter dealt with in the statute. Again, Dignan is the principal authority in support of that proposition. The final proposition is that if regulations once made are within legislative power, they will fall within the statutory power to make the regulations. The Court has so held on a number of occasions and I would simply refer the Court to R v Halton; Ex parte AUS 138 CLR 201 at 207.
HAYNE J: Does it follow that you contend that any term of or pertaining to employment may be prescribed as prohibited content?
MR TRACEY: Not anything, your Honour, because there are limitations imposed by this legislation.
HAYNE J: Yes. What are the limitations?
MR TRACEY: Well, if your Honour would go back, for example, to section 353, your Honour will find there a requirement that agreements must include dispute settling procedures. A regulation made under section 356 could not include such a matter as prohibited content. Section 354(2) ensures that protected award conditions are incorporated in agreements. A regulation made under 356 could not prescribe such material as prohibited content.
HAYNE J: Thus the proposition I put to you, you say has to be modified: any term of, or pertaining to, employment except those matters which are positively required by particular provisions of the Act.
MR TRACEY: It is wider than that. The qualification is wider than that, your Honour, because the regulation‑making power in section 846 which your Honour has seen requires consistency with the Act generally so that, for example, there could not be prescription in section 356 that reached so wide as to effectively undermine the State for making a workable agreement. There are other matters that would need to be borne in mind.
Your Honour will note a number of constraints on the power. The first one is the one to which we have already adverted, that the statutory context limits prohibited content to the content of agreements between constitutional corporations and their employees. We note, for example, in 356 itself, the requirement that any regulations be for the purposes of the Act and that has to be coupled with the provisions of section 846 to which I have already referred.
There is the constraint arising from a provision such as 353 and 354. There is the provision in section 173 about the standards, the fair pay standards that have to be observed. There could not be anything in an agreement by way of prohibited content that would undermine those standards and, of course, there are other matters as well. There is the general law doctrine that the regulation‑making power must be exercised bona fide for the purpose of carrying the purposes of the Act into effect. Any regulations made would, of course, be subject to disallowance and, ultimately, any regulation that was made that was beyond constitutional power would fall, but none of that strikes at the validity of section 356.
In our submission, this is not an unconfined power. It is a power of a kind that one finds in many Acts of Parliament. It is subject to those sorts of limitations. We submit that there is nothing in S157 211 CLR 476 at
512-513 that calls any of these propositions into question. The passage relied on by our friends appears in paragraph 102. I do not need to take the Court to it, but we do ask the Court to note that that passage did not relate to regulation‑making power, rather, it was concerned, as appears in paragraph 101, with some hypothetical examples of other forms of delegation that were raised by counsel in argument for the purpose of testing some propositions. Not surprisingly, the Court responded in paragraph 102 tentatively and did not say that such provisions were definitely invalid.
So it is our submission, if the Court pleases, that section 356 and the other provisions that are challenged in conjunction with it are valid and that accordingly the submissions to the contrary on behalf of the AWU should be rejected.
I should say one further thing, your Honours. The AWU submits that if the Court were to determine that section 356 was invalid, that Division 7B of Part 8 – that is sections 356 to 366 – would all fall with it. In our submission, that does not follow. If section 356 were declared to be invalid, then the regulations that have been presently made under it would fall, but the position would be precisely as it would have been had no regulations been made under it, namely that the other provisions would not be operative, but that is not a reason why they should fall.
The Parliament could rectify the situation by, for example, including in section 356 a prescription of the matters that presently appear in the regulations, and the provision could then operate. So that just because the provision would be for a short period rendered inoperative would not justify, in our submission, declaring that the whole of the subdivision fell. If the Court pleases, they are the submissions on the regulation‑making matter and my friend, Mr Burmester, will follow for the Commonwealth.
GLEESON CJ: Thank you, Mr Tracey. Yes, Mr Burmester.
KIRBY J: Mr Burmester, might I ask a question as to whether or not you can help with the identification of any provisions of the legislation that are designed to meet the issue of the core employees of the State of the kind who are beyond the reach of the federal legislative power. I should perhaps have asked this of the Solicitor, but if you can assist on that and draw attention to that, I would be grateful. It may well have been done before, but if you can draw attention to those provisions, I would be appreciative.
MR BURMESTER: Your Honour, there are no express provisions which, for instance, specifically exclude State employees who would be outside Commonwealth power based on the AEU principle, officers at a high level and so on. There is no express provision to that effect, just as there was no express provision in the Industrial Relations Act 1996. We would expect that the Act clearly would not apply to those officers who are immune from Commonwealth law. The States have withdrawn the limited challenge they did make to coverage of certain State employees from the present case, but there are no express provisions, if I understand your Honour’s question correctly, dealing with those high level State officers that would be immune from Commonwealth law. We would say the Act should be read down in order to recognise that constitutional limitation as it was in the 1996 Industrial Relations Case.
GLEESON CJ: If I recollect the progress of this litigation, there was originally an issue about that raised in the statement of claim and I then raised some questions at a directions hearing about the facts that were relevant to it and that issue was withdrawn or that challenge was withdrawn
MR BURMESTER: Yes, your Honour
KIRBY J: So on the face of the federal legislation it applies universally and, first of all, you have to identify the class and then do some surgery so that the legislation does not apply to such persons.
MR BURMESTER: No, your Honour, maybe I need to clarify that. It applies to those who fall within the definition of “employee” or “employer” in sections 5 and 6 so there may be some State Government employees employed by State corporations who would fall within it, but there is certainly no general application to all State public servants, for instance, if that was your Honour’s question. Section 5 does not purport to apply to all State public servants, it applies to employees of State corporations that happen to be constitutional corporations, but unless one falls within section 5 or 6 the Act will not apply to you. So there is no need to carve out either an exception for high level officers of the State or, say, public servants generally. The attack that was made, and it was withdrawn, focused on State employees in State corporations.
KIRBY J: At the moment they are covered even though they might, within the Constitution, be high State public servants?
MR BURMESTER: There is that issue which the States had raised and then withdrew because this was not a suitable vehicle, as to whether there may in fact be high level State Government employees employed by State corporations.
KIRBY J: But is it fair to say that it is yet a further indication of the universality and, on one view, the overreach of the federal legislation that it makes no distinction?
MR BURMESTER: No, your Honour, I reject that. Sections 5 and 6 rely quite directly on specific Commonwealth heads of power. The corporations power, in our submission, can extend to cover certain State corporations that are trading or financial corporations and, to that extent, certain State employees will be protected. But if a State, for instance, employs all its teachers or nurses as members of the public service and not as State corporation employees then this Act will not apply to them.
KIRBY J: In the modern age, of course, so many activities which once were performed by States and by governments are now performed by corporations so that the borderline would have to be worked out in the particular case.
MR BURMESTER: Yes, your Honour, as our submissions have indicated, working out what is a trading corporation may involve questions of degree and fact. Some of the States, in fact, have, in the light of this legislation, revised the arrangements whereby State employees are engaged, to move some of them back into the core public service and outside State corporations. I think New South Wales has taken measures to that effect and that is an option that is clearly open to the States and if they are not employed by corporations then there is no endeavour by the Commonwealth to control them.
KIRBY J: So that the State industrial tribunals would, at the least, have continuing functions to perform in respect of those employees and attempts to enjoin them to prevent them performing their functions, at least in respect of those employees, would be constitutionally invalid.
MR BURMESTER: Your Honour, I am about to come to section 117, the possible power to enjoin State tribunals. That is why we have Schedule 6, the transitional, because some of those State employees, particularly for instance teachers or nurses, may well have been within the federal system and under the new system, because they are not employed by constitutional corporations, they will have to move into the State system. So what has happened is that there is a realignment of those within the federal system and those outside it. It is not the same as before and it is not simply an addition to those that were in. There will be some who were in the old section 51(xxxv) system who will need to find a place in the State systems because they are not employed by an employer within the definition of section 6.
Your Honour, if I could perhaps go to section 117 which deals with State authorities being restrained from dealing with matters that are before the Commission. This is dealt with in our written submissions at paragraph 661 to 696 and South Australia in its submissions, 94 to 112. As South Australia indicated when they dealt with this issue, the section is based very closely on provisions that have been in the relevant industrial relations legislation since 1904. It is now confined, if one goes to section 117, simply to matters that are “the subject of a proceeding before the Commission under this Act”. It does not have the other components that might have been there before dealing with awards and so on.
South Australia has attacked the provision on essentially two grounds. The first might broadly be described as section 106 of the Constitution/Melbourne Corporation principle and then, as I understood the oral argument, secondly, that there is no head of power that supports its validity. They have abandoned their challenge to it on the basis that it involved the exercise of judicial power. In order to understand its validity, your Honours, I need to indicate how it operates. As one sees from its terms:
If it appears to a Full Bench –
that is, a Full Bench of the Commission –
that a State industrial authority is dealing or is about to deal with a matter that is the subject of a proceeding before the Commission . . . the Full Bench may make an order –
I need to take your Honours to section 4 of the Act where there was a definition of “state industrial authority”. That is on page 13 of the print. One sees that it is a limited definition. It is:
(a)a board or court of conciliation or arbitration, or tribunal, body or persons, having authority under a State Act to exercise any power of conciliation or arbitration in relation to industrial disputes within the limits of the State; or
(b)a special board constituted under a State Act relating to factories; or
(c)any other State board, court, tribunal, body or official prescribed for the purposes of this definition.
My understanding is no additional prescriptions have been made. Your Honours can see that it is limited to boards or courts of conciliation or arbitration, or tribunal, body or persons, having authority to exercise powers of conciliation and arbitration. So it is not a section that, for instance, gives the Commission power to restrain a State Supreme Court from exercising its normal civil or criminal jurisdiction.
KIRBY J: The Industrial Court of New South Wales has, of course, under the Constitution of New South Wales the same status as the Supreme Court.
MR BURMESTER: Yes, your Honour, it may have that status and it may well fall within ‑ ‑ ‑
KIRBY J: It is a constitutional status of ‑ ‑ ‑
GUMMOW J: That is not quite right, is it? They have the same status for the limited purpose of preserving ‑ ‑ ‑
MR BURMESTER: When exercising in Court Session. I think that is ‑ ‑ ‑
KIRBY J: No, that is gone. It is now the Industrial Court of New South Wales. It has been renamed from the Court Session.
MR BURMESTER: Your Honour, it may well be equated for certain purposes with the Supreme Court. My point is that section 117 is not capable in its terms of directing or having orders made directed at what one might call the core the judicial system of a State, particularly the Supreme Court or ‑ ‑ ‑
KIRBY J: The Supreme Courts are mentioned in the Constitution. The Industrial Court Commission is not.
MR BURMESTER: That is correct, your Honour. So my point is simply that the scope of section 117 is limited to other bodies that can exercise conciliation or arbitration powers. It is not directed at courts exercising the ordinary civil or criminal jurisdiction they may have.
If I can take your Honours back to section 117, it is also clear that it is limited to a situation where:
a State industrial authority is dealing or is about to deal with a matter that is the subject of a proceeding before the Commission –
At the Commonwealth end it clearly has to be a non‑judicial matter that is before the Commission, even if it happens to be a State court or tribunal that might also be dealing with the same matter, but what has been made clear from the cases on the predecessors of this section is that the power only operates in relation to a situation where the same matter is being dealt with before both the federal body and State body. So it is not a power for the Commonwealth body to restrain State bodies because there might be some remote connection with a matter before the Commonwealth body. The Commonwealth body, according to the judicial authorities, has to identify the matter with some particularity and it is only the matter that is before the federal body that can be the subject of an order under this section.
It may be that section 117 will have less work to do than it may previously have had to do if section 16 is valid and the State industrial authorities generally do not have concurrent jurisdiction over employers and employees within the federal system, but there may still be scope for the section to be used, for instance, if one party has brought a claim in a State body and the other party has brought a claim in the federal body alleging that they fall within federal jurisdiction under the definitions in section 5 and 6. It will also be used during the transitional period for five years where reliance is placed on the conciliation and arbitration power.
So the section, in our submission, does have some work to do, even if it is more limited than before. It has been used. I think Justice Kirby asked about its use in the past. There are cases set out at footnote 552 and paragraph 695 of our submissions which indicate some of the instances where reliance has been placed on that section in its previous forms. Your Honours, in our submission, it is not properly described as an injunction power. It is a statutory command to cease dealing with the same matter that is before the federal body and section 117(3) does impose a consequence if ‑ ‑ ‑
KIRBY J: Why is it not an injunction power? It is a command to stop.
MR BURMESTER: It is a command to stop, your Honour, but it is not the normal injunction power, namely, issued by a court and enforceable by the body issuing the injunction. What happens here is that there is a direction that:
The State industrial authority must, in accordance with the order, cease dealing or not deal, as the case may be, with the matter.
That is subsection (2). There is a consequence in subsection (3) that if there is to be any action taken against a State industrial authority that was, for instance, to ignore an order, action would have to be taken judicially to enforce it. So, again, in our submission, it is not properly seen as an interference, for instance, by a federal body with the exercise of power under the ordinary judicial system of a State by a non‑judicial body by the federal Commission.
KIRBY J: Given the sanctions, it must feel like an injunction if you receive it.
MR BURMESTER: It may, your Honour, but it is not, as has been clear from the South Australian note on the history of the section, something unexceptional or that has not been there for a long period and, in our submission, nothing that has occurred through the change in the basis of the Commonwealth Act, moving from the conciliation and arbitration power to the corporations power, makes any difference in that regard.
It has been held to be valid and certainly the most recent case that considered its validity in relation to the conciliation and arbitration power – that was R v Moore; Ex parte New South Wales Public Service Professional Officers’ Association (1984) 154 CLR 1 – I need not take your Honours to it – and at page 7 Chief Justice Gibbs said there was no reason to doubt its validity and Justice Deane at page 15 said he was “not persuaded that there exists any proper ground for questioning the correctness of the decisions” that say it is within power and Justice Dawson did say its validity may not be beyond question.
Apart from that, your Honour, there is, in our submission, well established authority that it was valid under section 51(xxxv). The question then is: is there any reason why it is not equally valid under the current system? In our submission, for the same reason it was valid before, namely, it enables a federal system to work efficaciously without unwarranted interference from a State body dealing with exactly the same matter, there is no reason why it is not equally valid based on the corporations power. If the system of industrial relations governing corporations established by the Act is valid, then it seems entirely incidental to the proper operation of that system that to the extent the Industrial Relations Commission has particular jurisdiction that it be free to exercise that jurisdiction without interference or having someone else at the same time dealing with the same matter.
Your Honours, in our submission, it is not unheard of for a federal body being able to exercise its powers to restrain a State body. In footnote 543 on page 163 of our submissions we give examples of Commonwealth legislation where restraint is imposed may result if a particular federal body – sometimes a court, sometimes not a court – takes action. One example might well be, for instance, under section 60 of the Bankruptcy Act if existing legal proceedings by a bankrupt can be restrained and the validity of that sort of provision has been upheld. Storey v Lane (1981) 147 CLR 549 and, more recently, your Honours, in the Full Federal Court, Campbell v Metway Leasing (2002) 126 FCR 14.
So, in our submission, this is not an unusual or exceptional provision. Nevertheless, the learned Solicitor for South Australia contends that in some way it infringes section 106 of the Constitution or the Melbourne Corporation principle. As I have indicated, the section does not operate to deprive the ordinary State courts of their general civil or criminal jurisdiction and, in our submission, it cannot ‑ ‑ ‑
KIRBY J: What is so special about their “ordinary” criminal or civil jurisdiction? It is still the work of the tribunals and courts of the State.
MR BURMESTER: Yes, your Honour, but in terms of section 106 of the Constitution it follows, in our submission, that the section does not operate on the fundamental framework or scheme of a State system of government, to use a phrase that has been used to describe the work of section 106 – the fundamental framework and scheme of a State system of government as opposed to a law that directly, for instance, sought to control a State Supreme Court which we would accept was part of a State’s Constitution for the purposes of section 106. This operates on industrial tribunals and bodies exercising conciliation and arbitration. So, in our submission, it does not fall with any of the conceptions, even given a broad meaning of State Constitution for the purposes of section 106.
CALLINAN J: Mr Burmester, some of the cases use the expression “essential functions of a State”. Do you know what I am referring to?
MR BURMESTER: Your Honour, I think that may come more out of the Melbourne Corporation Case.
CALLINAN J: Yes, but it is referred to in Murphyores too, I think. They are not defined by the Constitution, of course, but I would be interested to know how you would define them.
MR BURMESTER: Your Honour, what the Commonwealth has said in previous cases is that a State’s Constitution for section 106 purposes is not artificially constrained by whether something is in the State Constitution Act, for instance, but it does have to relate to the fundamental framework and structure of government and, as I said, a Supreme Court may well fall within that. But, in our submission, State industrial tribunals or courts with conciliation and arbitration functions that a State might establish do not fall into that category. So even giving “State Constitution” a broad meaning, it is not a fundamental framework in terms of essential ‑ ‑ ‑
CALLINAN J: Well, take section 51(i). It recognises that there must be State economies. There is not only a national economy. There is also a State economy, because if you talk about commerce among the States, you are obviously accepting that there is State commerce. Why is not State commerce an essential function of the State – the regulation and control of State commerce?
MR BURMESTER: Well, your Honour, my submission does not involve the proposition that it is not.
CALLINAN J: Well, if you say employment by all corporations, indeed employment is doing business; it is part of commerce. Assume you say that – and I think some of the Solicitor’s submissions go so far as to say that – then why should you not say that there is such a thing as State commerce and that the control of it is an essential function of the State, and commerce includes employment, paying people to work for you?
MR BURMESTER: Yes. Your Honour, even if that was correct and the Commonwealth law could not therefore intrude into that area, in our submission, to the extent the Commonwealth law was dealing with, say, interstate disputes, an area within Commonwealth jurisdiction, then there is no reason why in order to make that jurisdiction effective, it could not restrain the exercise of State jurisdiction for the limited purpose and only when it is dealing with a particular matter. So it is not as if section 117 is a general power to exclude State industrial tribunals from ever exercising their jurisdiction.
CALLINAN J: But I am talking more generally than that. I am really talking now about essential State functions.
MR BURMESTER: Well, your Honour, if one sought to apply the Melbourne Corporation principle or, as more recently expounded in Austin, in our submission, section 117 and does not impermissibly burden, restrict or otherwise control State activity, in particular the right of a State to function as a government or to exercise constitutional functions, in our submission, one cannot define or should not define the principle by reference to essential functions, which is a rather uncertain concept; rather one should ask, is the burden such that it restricts or controls State activity in a way which stops the State Government functioning as a government or exercising its constitutional powers.
CALLINAN J: If you can curtail its capacity to regulate internal – and you know what I mean by internal – employment, and you regard that as part of commerce, why are you not curtailing – which is part of the language of Austin and I think Melbourne Corporation - an essential State function?
MR BURMESTER: Your Honour, in our submission, the Melbourne Corporation and Austin principles have never been seen as extending to an activity in which a State happens to engage and immunising that from Commonwealth control simply because it might be seen as significant or important ‑ ‑ ‑
CALLINAN J: It is more than that. It is more than an activity in which a State engages. The whole existence of a State depends upon its economic welfare, upon its commerce.
MR BURMESTER: Yes, your Honour. In, for instance, the Australian Education Union Case, the only restraint under the conciliation and arbitration power on State government employees was those at a very high level of office. There was no suggestion that there was a complete immunity from Commonwealth control of State employees generally or employees engaged in local commerce. In our submission, that would be to read restrictions and limitations into the power that have not in the past been recognised and which we say would be inappropriate.
CALLINAN J: That was not a case like this. This is an entirely different case and there are different arguments being presented here. In any event, I have exposed a concern of mine, Mr Burmester.
MR BURMESTER: Yes, your Honour, and, as I indicated to Justice Kirby earlier, there is not an attempt here to control State employees per se. It is only if they are employed by corporations that they fall within the federal system. I am reminded that we do accept that Parts 15 and 16, that is the right of entry and freedom of association, may have some application to the States even where there are not constitutional corporations involved, but it is a limited reach of Commonwealth authority. Your Honours, the point I was trying to make was that section 117, by any measure, cannot be seen as the sort of interference with a State government and State government institutions which would ‑ ‑ ‑
KIRBY J: Does that concession about freedom of association arise out of international obligations under ILO conventions?
MR BURMESTER: No, your Honour, there is no reliance on external affairs power or international obligations for the current rights of entry provisions.
KIRBY J: There was under the 1996 Act, I think, or 1993 Act.
MR BURMESTER: You may be right, your Honour.
KIRBY J: That has all been withdrawn, has it?
MR BURMESTER: Certainly any reliance on international obligations for right of entry, that is right.
KIRBY J: Is that because some of these provisions are not in conformity with our obligations under the international obligations?
MR BURMESTER: Your Honour, I do not know that one can draw that conclusion. I think that Parliament has simply chosen not to rely on international obligations to sustain those parts of the Act. It has chosen in other parts, like parental leave, to continue to rely on external obligations.
KIRBY J: But presumably those obligations remain in force. They have not been denounced.
MR BURMESTER: Yes, your Honour, and there are, I understand, one or two ILO conventions that do deal with rights of entry, but my point is simply there is no reliance placed upon them for purposes of the relevant provisions.
KIRBY J: Presumably they remain in force and relied on for the transitional arrangements. Insofar as section 51(xxxv) is still applicable in that area, presumably also the external affairs power is still invoked.
MR BURMESTER: Your Honour, I cannot say whether that is right or wrong. I could provide a short note, if that would assist, but I do not think I can answer that question.
KIRBY J: If you would that and anything else that is relevant to the ILO conventions to which Australia is a party.
MR BURMESTER: We are happy to provide such a note. The purpose of my submissions in relation to 117 are simply that the nature of that provision is not such that it could be seen as offending section 106 of the Constitution or the Melbourne Corporation principle. To the extent the States suggest that Re Tracey (1989) 166 CLR 518 would lead to that conclusion, we say that that is not necessary to determine that because Re Tracey, properly construed, can be seen as dealing with an entirely different situation. That dealt with the exclusion of ordinary State criminal law and, in our submission, there is no reason, for the purpose of deciding the validity of 117, to revisit Re Tracey. In our submission, it can be distinguished. In any event, in our written submissions, at paragraphs 672 to 680 we have indicated why we consider Tracey was wrong and, if necessary, should be overruled but, your Honour, our principal submission is that there is no reason to address that issue in this case. One can decide the validity of section 117 without doing so.
Your Honours, if I can move then to the next issue I need to address which is section 16. Section 16 is on page 23 of the Act. This is dealt with in our submissions paragraphs 590 to 620. Your Honours, the first issue is one of construction: what does section 16 purport to exclude? In our submission, it is clear from the chapeau of 16(1) that what is purported to be excluded is State law that would otherwise apply only in relation to an employee or employer as understood in sections 5 and 6. So it is not an attempt to exclude all State law dealing with any employees or employers; it is only employees and employers as understood in section 5 and 6.
The reason this is clear becomes apparent from Schedule 2 of the Act which has identified particular paragraphs in section 16 as excluded from those definitions in section 5 and 6 where the terms “employee” and “employer” and “employment generally” have been given their ordinary meaning. That is clear in schedule 2 in item 2.1 which singles out section 16(3)(g) and (m) which use the word “employee” in (g) about public holidays, so it has its ordinary meaning there and then in (m), “association of employees” has its ordinary meaning. In item 4.2(b), 16(1)(d) is given the ordinary meaning. But apart from those particular paragraphs, there is no reason, in our submission, why particularly in the chapeau of section 16 the words “in relation to an employee or employer” should not continue to be given their section 5 and section 6 meanings. As I understood Western Australia, they seemed to ‑ ‑ ‑
GUMMOW J: I am sorry, Mr Burmester. So you are saying, looking at 16.1, the opening words, “employee” and “employer” there, is a constitutional ‑ ‑ ‑
MR BURMESTER: Is a constitutional one. So the scope of section 16 is clearly limited to situations where the Commonwealth has constitutional power, in our submission. So when we exclude particular State laws, we only exclude them, as 16(1) makes clear, so far as they would otherwise apply in relation to a federal constitutional employee or employer.
GUMMOW J: That then does not help you with 16(4).
MR BURMESTER: No, your Honour. I will come to that separately. In our submission, there is no reason why, for instance, 16(1)(e), a representative of a trade union having a right to enter premises – I understood Western Australia to suggest that in some way that could not be read in a way that was confined to employees or employers as understood in section 5 or 6. In our submission, that is not correct. Read with the rest of the chapeau, it clearly means a law relating to entry to premises in relation to employees or employers covered by the Act, that is, to situations involving section 5 or 6 employers and employees. We are not excluding State law dealing with trade union rights to enter for all purposes in relation to employees who might have no connection with the federal system.
GLEESON CJ: What about 16(1)(d)?
MR BURMESTER: Yes, your Honour, that is the unfair contracts. Again, what we are excluding is the application of State laws dealing with unfair contracts only to the extent that they would apply or are sought to be applied to constitutional employees or employers.
GLEESON CJ: Especially bearing in mind the prohibited content aspect of this legislation, you may have in a State a law that, on the face of it, gives a wide power to vary contracts of employment between ordinary employers and ordinary employees, that is, constitutional employers and constitutional employees. The Commonwealth does not purport, or may not purport, to regulate what I might call the general matter of the fairness of the employment contract. The argument against you, as I understand it, is that this is an example of the Commonwealth saying, “We don’t intend to legislate about general matters of fairness in relation to these contracts and you may not”. That is to say, to use the phrase with which we are accustomed, a bare exclusion of State law.
MR BURMESTER: Yes, your Honour, and I understood that to be, in a sense, one of Western Australia’s principal criticisms of it. In response to that we say the following, that the covering the field test has always recognised that the Commonwealth has a capacity to indicate the field that it wishes to occupy to the exclusion of State law without having to make its own detailed provisions on exactly the same matters. That is not to say that it can simply legislate at large to exclude State law making from anything to do with trade and commerce or lighthouses or something that might potentially be within a Commonwealth power.
My proposition is not as broad as to say that a law that simply sought to exclude State law and made no provision whatsoever in that same subject matter was within power, but in this case we have legislated a detailed set of rules and minimum requirements and content for particular agreements and so while we have not dealt specifically with the subject of unfair contracts, except in relation to independent contractors, in our submission, that does not preclude the Commonwealth from indicating its intention to occupy the field of employment contracts for constitutional employees to the exclusion of any other State law that might impact or take away rights.
GLEESON CJ: It may depend on how you define the field. As you are probably aware, there are some State decisions that give a pretty ample definition to this field of employment contracts.
MR BURMESTER: Your Honour, the field we have defined is the field defined by the relations between constitutional employees or employers and what we have said in 16(1) is that to the extent a State law would seek to interfere with that employment contract on the basis of unfairness then there is no scope for that State law to operate.
GLEESON CJ: Let me give a practical example. Suppose you had – and some of these employment contracts that I am about to mention operate at a fairly high level of management – a contract between a constitutional employer and a constitutional employee that provided for the employee, as part of his or her remuneration, to receive share options and suppose a dispute arose between the employer and the employee as to the fairness of the terms relating to those share options, perhaps a dispute arising out of some change in market conditions which is alleged to have made the agreement as originally struck unfair and suppose you had a State law that conferred jurisdiction on a tribunal to review that contract and even to rewrite the terms of the share option. Is that a matter that is part of a field that the Commonwealth purports to occupy under its legislation?
MR BURMESTER: Yes, your Honour, if it is a contract between a constitutional employee and employer and there is an employment contract governing that relationship, then section 16(1), subject to any modification by either subsection (3) or regulations to allow State laws to operate, would say that this Act applies to the exclusion of that State Act. So that even though it might deal with high level employer or employees, if it is governed by this Act, relates to an employee or employer within section 5, then the Commonwealth Parliament has indicated it wishes to occupy that field to the exclusion of State law.
That is not, in our submission, necessarily surprising. The Act sets out a detailed set of minimum conditions and then provides mechanism for workplace agreements, either collectively or individually, and if that set of arrangements was able to be varied or set aside or in some way impugned by going off to a State tribunal, then, in our submission, one clearly would have interfered with the integrity of the Commonwealth system.
HAYNE J: Does that proposition assume that Part 8 is an exhaustive description of the way in which employment agreements may be struck?
MR BURMESTER: Your Honour, I think there may still be scope for agreements outside Part 8.
HAYNE J: My impression was that Part 8 was to the general effect an “employer”, as defined, may make agreements with its “employees”, again as defined, in any of a number of ways with consequences thus prescribed, but that Part 8 did not say, “These are the only ways in which employers as defined may make employment agreements with employees”.
MR BURMESTER: I think your Honour is right; I do not disagree with that proposition.
HAYNE J: If that is so, does not the proposition you last advanced depend upon or implicitly assert that the Commonwealth has wholly covered the field of employment contracts, and yet Part 8 does not?
MR BURMESTER: We have covered it, your Honour, only in relation to unfairness. If one reads 16(1)(d), it is only a law providing for variation on the basis of unfairness. So if there is a common law contract, for instance, outside Part 8, then the Commonwealth does not purport to prevent any remedy being obtained under that common law contract under State law, except in relation to unfairness, and yes, we have purported to exclude State laws dealing with unfairness in a broader situation, as I read section 16, than possibly situations covered by workplace agreements. Your Honour, we say that does not mean there is a constitutional difficulty because ‑ ‑ ‑
GLEESON CJ: Part of the problem arises because the way some of these State laws about unfair contracts of employment operate – indeed, one of the complaints that is sometimes made about the way these State laws operate is that that they go well beyond what might be commonly regarded as the industrial context and into the commercial context.
MR BURMESTER: Yes, your Honour, that is so.
KIRBY J: You say that this is not surprising, but one point of view is that in a federation it is surprising that you are preventing the experimentation in the State sphere which is said to be one of the strengths of Federation and you are striking at so‑called work choices which, on the face of things, are designed to promote diversity in employment relationships, but which your legislation is designed to prevent and to stamp a uniform federal approach without the experimentation that Federation provides for.
MR BURMESTER: Your Honour, in our submission, if that is a consequence, then it is a consequence the Commonwealth Parliament is entitled to make. Can I just put some flesh on the bones of some of what I have been saying. Regulation 8.5 dealing with prohibited content, in subsection (5) says that:
A term of a workplace agreement is prohibited content to the extent that it confers a right or remedy in relation to the termination of employment of an employee bound by the agreement for a reason that is harsh, unjust or unreasonable.
So to the extent there is a workplace agreement under Part 8, one cannot have any additional term in relation to unfairness.
HAYNE J: Is not the regulation to which you just took us tied back into the definition of “workplace agreement” contained in section 4, page 15 of the print?
MR BURMESTER: Yes.
HAYNE J: Those being agreements of a kind given effect by section 351 at page 241 of the print, given effect in the sense that a workplace agreement that is in operation binds those who are there identified?
MR BURMESTER: Yes, your Honour. So we have dealt with workplace agreements in that detailed way. I acknowledge that section 16(1) is not talking about workplace agreements. It talks about contracts of employment and not workplace agreements and so the effect of section 16(1)(d) is, as the Chief Justice raised, to exclude State law dealing with employment between constitutional employees or employers even if under a common law contract of employment and yes, the rest of the Act makes no particular provision in relation to that but, in my submission, that does not lead to an excess of power or invalidity. It is a clear statement by the Commonwealth of its intention to occupy that field or to exclude State law from that field and, in our submission, that is ‑ ‑ ‑
HAYNE J: Can I just be sure about one thing that I understood you as just saying? Is it clear that what you have called a common law contract of employment is dealt with in the Act only in 16(1)(d). That may be a question that you cannot answer on the run, Mr Burmester, but ‑ ‑ ‑
MR BURMESTER: I am reluctant to give a general answer immediately, your Honour ‑ ‑ ‑
HAYNE J: ‑ ‑ ‑ it is a point about which I would be glad to have a considered answer when you are in a position to do so.
MR BURMESTER: Yes, your Honour. We will endeavour to provide that, if possible, today. Certainly there is a distinction between contracts of employment in 16(1)(d) and workplace agreements in Part 8 and yes, 16(1)(d) is talking more generally about contracts of employment. Now, your Honours, to make good the submission I am attempting to make can I take your Honours to Wenn v Attorney-General (Victoria) (1948) 77 CLR 84 at 107 ‑ ‑ ‑
GUMMOW J: Perhaps it helps to understand the particular legislation in Wenn.
MR BURMESTER: Yes, your Honour. I was going to do that on page 107. In particular you will see on page 107 section 24 of the Commonwealth Act and there are two subsections. It is really the second subsection at about point 4 that is the scope of the Commonwealth law that is set out. It says:
The provisions of this Division shall apply to the exclusion of any provisions, providing for preference in any matter relating to the employment of discharged members of the forces, of any law of a State . . . and whether the law, award, order, determination or agreement was enacted, made or filed before or after the commencement of this section.”
So the Commonwealth states there its intention to apply its law to the exclusion of any provisions providing for preference in any matters relating to employment. Now, the Commonwealth had made no specific provision in relation to preference for promotion but the State law did specifically deal with promotion and the issue was whether section 24(2) was effective to displace the State law dealing specifically with promotion, a matter about which the Commonwealth had made no specific provision. The Court said that that was valid and the Commonwealth had successfully displaced the Commonwealth law although it had made no specific provision on it.
If I can go over to page 108 at about point 5 your Honours will see in Chief Justice Latham’s judgment he says:
This section does in terms exclude any law of a State providing for “preference . . . Promotion is employment of an employee in a higher position than that previously occupied by him . . . preference in a matter relating to the employment . . . This sub‑section is relied upon as an express provision showing the intention of the Commonwealth Parliament . . .
If the Commonwealth Parliament, in a law with respect to a subject within its legislative powers –
and I might need to come back to those words –
enacts provisions which show that the Parliament intended to make an adjustment with respect to certain matters upon a particular basis to the exclusion of any other adjustment, then the result is to exclude the application of any State legislation or other provision which would “disturb or vary the Federal adjustment” –
And 109 at about point 2 quoting from Ex parte McLean Chief Justice Latham says:
if the intention of the paramount legislature is “to express by its enactment, completely, exhaustively, or exclusively, what shall be the law governing the particular conduct or matter to which its attention is directed . . . it is inconsistent with it for the law of a State to govern the same conduct or matter”. . . the legislature has made its intention clear by saying in s.24(2) that the subject matter as to which it is intended that the legislation shall be exclusive and exhaustive is “preference in any matter relating to the employment of discharged members of the forces.”
Now, your Honour, we say section 16(1) does exactly the same thing and we have made clear our intention exhaustively to exclude State laws dealing, for instance, in 16(1)(d) with variation of:
contract of employment . . . that a court or tribunal finds is unfair –
and we say we have done no more than what Wenn’s Case would allow.
GLEESON CJ: I realise that this question may raise matters that are going to be the subject of the note that you are providing an answer to Justice Hayne’s question, but a lot of energy was spent on working out the meaning of the expression “industrial disputes” under paragraph (xxxv). Now that the Commonwealth has moved from reliance on paragraph (xxxv) to reliance on paragraph (xx) it is necessary, I think, to understand how the legislation works in relation to contracts of employment that would in the past have been regarded as outside the industrial context. How does this legislation operate in relation to a contract of employment between, say, an insurance company and its chief executive which might be a very elaborate contract of employment and would certainly contain a lot of what might otherwise be prohibited content?
MR BURMESTER: Your Honour, we will cover some of this in a note, but can I indicate the following? That sort of employment contract you mentioned would not be a workplace agreement and so a lot of the detail about prohibited content and so on would not apply to it. However, there is ‑ ‑ ‑
GLEESON CJ: Why would it not be a workplace agreement?
MR BURMESTER: Well, your Honour, it could be a workplace agreement, but it may have been made simply as a common law contract of employment.
HAYNE J: Because the central scheme of the Act in this regard has two relevant parts, does it not? Part 7, a constitutional corporation must meet certain minima.
MR BURMESTER: Yes, your Honour.
HAYNE J: Part 8 is, a constitutional corporation may but need not, may make its agreements with employees in any of a number of ways with the following specified consequences if it does.
MR BURMESTER: That is correct, your Honour. Under Part 8, for instance, a workplace agreement needs to be lodged, cannot have certain content and so on. In the example the Chief Justice gave, a contract with a chief executive, I think it is most likely that Part 8 would not be engaged, it would not be a workplace agreement, the employer would not have chosen to bring it under this Act.
In terms of Part 7, section 173 which deals with the Australian fair pay and condition standard, makes it clear that even in a common law contract, not only in a workplace agreement, one cannot exclude the Australian fair pay and condition standard. So that to that limited extent at least, at least in terms of minimum standards, the Act does operate on any employment contract between a section 5, section 6 employee/employer.
There is some intersection between common law contracts and this Act – it is a limited intersection, in my submission – principally directed, for instance, at minimum standards but in section 16(1)(d), we also intersect with common law contracts by seeking to exclude particular State laws dealing with such contracts, namely, laws for their variation on the basis of unfairness. Your Honour, we might elaborate in the note that Justice Hayne has requested.
GLEESON CJ: Thank you.
MR BURMESTER: So, your Honour, there being some intersection, the Commonwealth having chosen not to deal comprehensively with, for instance, contracts of employment outside the specific ones dealt with in the Act, nevertheless, we say, it is open to the Commonwealth Parliament to indicate an intention to exclude certain State laws that might otherwise govern that employment relationship which is otherwise within Commonwealth constitutional power. We submit that Wenn’s Case enables the Commonwealth to do that without making its own provision on the point.
Your Honours, could I take you to Justice Dixon’s judgment in Wenn as well on pages 119 and 120 and, in response to the argument that the federal Act leaves the question of promotion clear of statutory regulation and therefore State law can operate, in the middle of the page Justice Dixon responds to that argument, and over onto page 120 ‑ ‑ ‑
GUMMOW J: It is the last sentence on 119 really that perhaps encapsulates it.
MR BURMESTER:
In this Court it is far too late to contend that s. 109 does not invalidate State law which in such a state of affairs carries the regulation of the same matter further than the Federal legislation has decided to go.
GLEESON CJ: That expression, “the same matter” ‑ ‑ ‑
MR BURMESTER: That does leave room for argument, your Honour. We say “the same matter” here is the matter we have identified in section 16 which does extend beyond those covered by, perhaps, Parts 8 and so on, dealing with individual agreements.
GLEESON CJ: A way of putting the question might be whether, in the example that I gave about the insurance company’s chief executive, that really is a matter that the federal legislation is regulating.
MR BURMESTER: To the extent, for instance, where we do make some provision about it, namely, that the minimum conditions, the AFPC standard, for instance, cannot be excluded.
HAYNE J: A matter of high moment.
GLEESON CJ: The risk of that being fairly remote.
MR BURMESTER: On page 120, Justice Dixon says, at about point 2:
To legislate upon a subject exhaustively to the intent that the areas of liberty designedly left should not be closed up is, I think, an exercise of legislative authority different in kind from a bare attempt to exclude State concurrent power from a subject the Federal legislature has not effectively dealt with by regulation, control or otherwise.
HAYNE J: What do you say in that sentence, applied to these facts, is the subject of which his Honour first spoke?
MR BURMESTER: The subject is the subject reflected in the chapeau of section 16(1), the relation between an employee or employer as defined in sections 5 and 6. So, yes, it is a broad area but, we say, when one then looks at the laws that are proscribed or excluded in section 16(1), one can see that they all relate back to that employment relationship.
GLEESON CJ: Other obstacle to their understanding.
MR JACKSON: It seemed to be suggested, your Honours, at some point that the operation of Schedule 1 to the Act might come to an end after three years. The position, of course, is only that because of clause 4 - Schedule 4 to the amending Act, an organisation which was registered prior to the commencement of the amending Act is not liable to have its registration cancelled under section 30(1)(c)(v) of Schedule 1 on the ground that it “is not, or is no longer, a federally registrable organisation”. Your Honours, that has the consequence that the transitional operation of Schedule 1 in that regard would depend on the terms defined in sections 18 to 18D and really is in that sense not severable.
Could I also say that a further argument was developed that Schedule 1 could be regarded as valid on the basis of it being a kind of freestanding exercise of legislative power. Your Honours, it is difficult, in our submission, to accept that proposition because of, amongst other things, the terms of section 5 of Schedule 1, and may I come to that, your Honours. This is page 675 – your Honours will see that subsection 5(1) of the schedule says that:
It is Parliament’s intention in enacting this Schedule to enhance relations within workplaces between federal system employers and federal system employees and to reduce the adverse effects of industrial disputation.
But then one goes on, your Honours, to see what is in subsection (2):
Parliament considers that those relations will be enhanced and those adverse effects will be reduced, if associations of employers and employees are required to meet the standards set out in this Schedule in order to gain the rights and privileges accorded to associations under this Schedule and the Workplace Relations Act.
Now, your Honours, if one is looking to see under Schedule 2 and looking to see is this a freestanding, as it were, enactment, one of the difficulties that arises is that nowhere in that schedule does one see what are the functions of such an organisation. The closest thing is perhaps section 27 which is simply a fairly standard provision dealing with the general powers of an incorporated body.
Your Honours, it is one thing to say everyone who has a particular quality, a federal system employee, and they can go into these organisations, but if one is looking to see it as an exercise of at least the corporations power it does not appear to perform any relevant function until it is tied up with something else.
Could we refer also, your Honours, to a number of provisions, and I do not mean to say these are in any way exhaustive, dealing with the fact that the body is one whose functions appear to be those of dealing under the Act itself. May I merely mention to your Honours section 19(1)(e) and (1)(i) and (3) and section 28(1)(a) and (d)(iv).
May I come then to section 356. The argument on behalf of our learned friends appeared to be that simply because the provisions of Division 7 of Part 8 referred to what would be prohibited content there was not any difficulty in granting an unlimited – I will say a qualification to that in a moment – power to the Executive Government to make regulations specifying the matters which might be prohibited content.
Your Honours, we are not, of course, talking about a Parliament, the legislative power of which is not constrained by requirements as to subject matter. The nature of some of the section 51 legislative powers, notably section 51(i), is such that wide powers to regulate may be given to the Executive. But, your Honours, that is not so, we would submit, in relation to section 51(xx) where there must be some connection to corporations. In that regard, section 356 itself gives no guidance at all, and I went through other provisions of the Act to submit that none of the other provisions, including the regulation-making power and including the objects, made up the gap.
Of course, the regulations cannot be inconsistent with the Act and, of course, they must be consistent with the Act if one puts the two concepts together but that, your Honours, is the problem. In the end, in our submission, the arguments on behalf of the Commonwealth really come down to no more than that the regulations may provide the matter, which is prohibited content, and that matter is whatever the Executive Government decides is prohibited content.
Our learned friend, Mr Tracey, set out four propositions said to derive from the case law on this point. The first was that the Commonwealth may provide for subordinate legislation in wide and general terms. Your Honours, of course it may, but it must depend on the subject matter being addressed. The second point was that the repository of power was free to exercise a discretion and Capital Duplicators was relied on for that. That is true, but what is meant by that, one can see in a sense from Capital Duplicators 177 CLR 248 at 265, what was said there, your Honours, was, if one looks at the second paragraph on the page, the second sentence:
It is clear from a reading of that part of the judgment of Dixon J. in Victorian Stevedoring which follows the passage previously quoted that his Honour considered that the separation of powers effected by the Constitution does not make the Parliament the exclusive repository of the legislative power of the Commonwealth and does not preclude the delegation of a legislative power by the Parliament to the Executive in such terms that the repository of the power is free to exercise its own discretion and judgment.
Now, that is so, your Honours. It is free to exercise a discretion and judgment. The judgment of the Executive does not have to be fettered, but having said that, it does not follow, in our submission, that one is talking about – and one can see this, it is submitted from looking at the passage in Victorian Stevedoring 46 CLR 73 at 101, which was referred to. Your Honours, if one looks at the passage - it is really, in a sense, the whole of page 101 - there is nothing to suggest that the Executive may have an absolutely uncontrolled discretion as to the laws which might be made. Your Honours, I referred earlier to page 101.
The third proposition, your Honours, was that the power to make regulations will have the same character as the statute. The reference in that regard was Victorian Stevedoring, again, at page 121 on this occasion. I think it is paragraph 5 in Justice Evatt’s statement. Your Honours will see that he is referring there to the fact that:
regulations merely for the purpose of carrying out a scheme . . . will not prevent the section conferring power to make regulations from being a law –
et cetera. That is the context in which he makes the observation in the next sentence and I referred earlier to the fact that it is clear enough that the scheme he was talking about was one that was dealt with in that Act. I gave your Honours the reference the other day.
Your Honours, the fourth point was that if regulations once made were within the constitutional power, I think it was said, that was enough. Reference was made to R v Halton 138 CLR. Your Honours, could I say in that case there was no suggestion that the breadth of the regulation power in that case was itself a problem.
Your Honours, the last matter in this regard is what happens if section 356 is invalid. The result would be, we would submit, that section 356 would be struck out. There is nothing on which the other provisions of the Act, which are dependent on the specification of the matter which is prohibited content, could operate and the general regulation‑making power would not, in our submission, assist.
Could I move then, your Honours, to something that is in relation to section 16. This is an issue on which submissions were addressed by Western Australia orally before. May I just say a couple of things about it. Your Honours, even if the field of regulation by the Act can be defined in the way in which the Commonwealth would define it, that is, as between employers and employees being constitutional corporations or of constitutional corporations, section 16(1) is not confined to that field. It excludes laws identified under that section so far as they would otherwise apply to an employee or to an employer. It is enough that the State law applies to one or the other of them. Your Honours, it does not exclude State laws so far as they regulate the relationships between those persons or which apply to employees and employers.
Your Honours, in relation to section 16 also one does need to bear in mind that there are three ways by which regulations can affect the operation of section 16. The first is that paragraph (d) of the definition of “State or Territory industrial law” in section 4 – that is page 13 of the Act – enables laws to be prescribed for the purposes of that definition. There are no specified criteria for those laws. The second thing, your Honours, is that section 16(2)(b) enables regulations to prescribe laws to which section 16(1) does not apply. Again, no criteria are specified. The third thing is that section 16(4) provides that:
This Act is intended to apply to the exclusion of a law of a State or Territory that is prescribed by the regulations for the purposes of this subsection.
Section 16(5), of course, makes it clear that they may be laws to which section 16(2) otherwise apply. Again, no criteria specified. Your Honours, the result is that whilst section 16 lists certain kinds of State and Territory laws which are intended to be excluded or not excluded, the list is merely, in effect, a default provision which can be varied by regulation.
Your Honours, the substantive effect of section 16 in those circumstances is the same as if it had simply provided that the Act was intended to operate to the exclusion of such State laws, we would submit, on any topic as are prescribed by regulation and that in default of regulation a number of kinds of State law are excluded. Your Honours, could we say also in relation to our learned friends’ submissions that the provisions of section 16 which authorise the making of regulations cannot be severed, we would submit, from the balance of the provision and to do that would alter its operation in a fundamental respect.
Now, your Honours, overall in that respect we would submit the fundamental difficulty is that the State laws which are purportedly excluded by or under section 16 are not confined to the field regulated by the other provisions of the Act. No doubt some laws do not have to do that, but the State laws which may be excluded may lie quite outside the Commonwealth legislative power.
Your Honours, the final thing I wanted to say, if I may, is something in relation to the submissions made by my learned friend, Mr Hutley, and it is this. Your Honours, our learned friend, Mr Burmester, said that if one looks at clause 18B(2)(b)(ii) to (iv), the trade and commerce provisions, they involve a large – I am sorry, your Honours. May I say that contrary to what was said, the provisions of clause 18 do involve a large number of persons who would not be covered by clause 6 and that is all non‑corporate businesspersons who are engaged in trade and commerce.
Your Honours, there is one other point in that regard. If one looks at the position in relation to Mr Hutley’s argument, if one looks at the position of an employer who falls within section 6 of the Act who has only 100 employees, if those employees belong to a union which has 99 other non‑federal system employees, then the employer can invoke the Act. It can invoke the Act in the sense of becoming party to an agreement with an organisation. However, if the organisation has 101 other non‑federal system employees, that would not be able to be registered and, your Honours, that is because of the majority requirement, and our learned friend Mr Burmester’s invocation of section 19(1)(i) would not meet that point. Your Honours, it would not meet, if I could use the expression that was used earlier but one which I use for convenience rather than adoption, the weirdness of the provision. Your Honours, those are our submissions.
MR BENNETT: Your Honours, there are three short matters in those replies which are to some extent new and which we seek leave briefly to answer. I can do that either in writing within seven days or attempt to do it ‑ ‑ ‑
GLEESON CJ: What are, without developing them, just identifying them?
MR BENNETT: The argument put by my learned friend, Mr Walker, about the fact that his internal/external theory is justified by the fact that before the body can become a trading corporation it must do some trading which requires an employee and therefore everything to do with employment is in some way anterior – that argument.
GLEESON CJ: What is the second one?
MR BENNETT: The second one is the reference in my learned friend the Solicitor for Queensland’s submissions to the Commonwealth concession about the absence of authority and just explaining what that is absence of authority on.
GLEESON CJ: Yes, and the third one?
MR BENNETT: The third one is the explanation now given in rather more comprehensible form of what I described as the incomprehensible argument which I did not really deal with in my submissions.
GLEESON CJ: You have seven days to put it in writing.
MR BENNETT: If your Honour pleases. The other thing I should mention, your Honour, is that – and this may just require alteration of the document – the so‑called matrix does not refer to the arguments about section 356.
GLEESON CJ: You are complaining about that?
MR BENNETT: No, not complaining, your Honour, I am just suggesting that if it is to be used as a guiding document that probably should be corrected somewhere.
GUMMOW J: Are you sure 356 is not there?
MR BENNETT: Yes, the argument is about regulations. In the list of regulation‑making things that are attacked, that is not referred to.
KIRBY J: Mr Jackson was just dealing with it then.
MR BENNETT: Yes. Your Honour, all I want to say is that the matrix should be amended just to have a reference to that, if it is being used.
GUMMOW J: This is in paragraph 25, is it, of the matrix as it is? It has been left out.
MR BENNETT: Yes, that is where it probably should be added.
GUMMOW J: Is that right?
MR BENNETT: Yes, your Honour.
GLEESON CJ: That is in the highest tradition that you have drawn that to our attention.
MR BENNETT: If I seek leave to amend my learned friend’s document.
GUMMOW J: So in 25, is it, we add 356?
MR BENNETT: I am sorry, your Honour.
GLEESON CJ: To number 25 in the matrix we should add a reference to section 356, is that right?
MR BENNETT: Yes, and, your Honour, those who are sitting near me are suggesting that I should have asked for 14 rather than seven days, that being the period for all the other documents.
GLEESON CJ: Yes, that is all right.
MR BENNETT: Yes, if your Honour pleases.
GLEESON CJ: We are obliged to all counsel for their assistance and we will adjourn until 10.15 on Tuesday, 16 May.
AT 4.02 PM THE MATTERS WERE ADJOURNED
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